National Equity Exchange and Quotation (NEEQ), as an important part of China's multi-level capital market plays an important role in the direct financing for small and medium enterprises. Since its inception and through its progress, NEEQ's listed companies’ illegal operations have become more and more common, and more secretive. In this regard, last year the Securities and Futures Commission (SFC) took some actions in some extent, yet it was not enough to solve the problem. For NEEQ to play a greater role, first of all it needs to strengthen the regulations to clear the various problems on the market. As China’s domestic securities, insurance and banking are being regulated, NEEQ shall not become a safe haven. It should tap into the new system’s advantage, and should be established in the orderly market order. The many drawbacks will become the future direction of the SFC’s focus.